Saturday, October 11, 2008

Global financial meltdown - How to protect yourself

A contagius virus called CONFIDENCE CRISIS have spread out of US to the rest of the world and caused the global financial meltdown.Because of the Non Performing Loan in the US housing sub prime market,a big hole was created in the accounts of the Banks,Brokers and Hedge funds. In order to cover this big hole,The US banks,brokers and hedge funds sold off their investments in the rest world in order to bring the money back to the US to solve their financial problems.Thus, the banking system and the stock market around the world collapsed.
Currently,if you have big amount to pay for your house,car,capital commitments together with business loan with overdraft and credit cards, YOU MUST WORRY because with all these liabilities,you will go bust when real effect of this crisis reach Malaysia in 6 months time.
If you none of the above,you can sleep easy but you will also be affected but on a much smaller scale.
Therefore,to avoid being trap in this financial turmoil,my advice to the readers of this blog is as follows ;-

1) Avoid big ticket items like buying a new house or car.

2) Avoid big capital commitments.

3) Avoid taking any banking facilities like loans and overdraft with credit cards.

4) If possible, pay off all your debts.

5) Defensive and prudent in spending and buy what is needed at a cheap price.
If you follow what is listed,you will be okay during this global financial crisis
when it hit Malaysia very soon.